We have reported here extensively the great strides private label
has made in the past few years, as cash-strapped consumers turned to
in-store brands for value.
Package design has played a major role in these gains, as private label
teams showed they could innovate faster than CPGs, with designs
rivaling the big boys.
Now, for the first time, sales figures show consumers may be returning to national brands like H. J. Heinz and Del Monte.
“Store brands rose 3.2% at retailers for the four-week period ended
Feb. 20, according to a Thursday report released by Credit Suisse
analyst Robert Moskow,” says the WSJ report
“But the increase is down from a 4% gain in January and an about 6%
gain, excluding dairy, last July. At the same time, branded-food unit
sales rose 2.4% for the February period compared to a 0.2% decline for
the four weeks ended Jan. 23.”
The Journal article, penned by Timothy W. Martin, quotes Steve Burd,
Safeway Inc. chief executive officer, who says that “the supermarket
chain's private-label sales are still stronger than those of branded
companies. However, the private-label growth is maybe not as strong as
in previous quarters.”
CPGs are achieving these results with more promotion and coupons,
rather than price cuts. Interestingly enough, Martin says the market
share lost by retailers to higher priced national brands may not be a
bad thing. Private label had to lower prices to widen the “value gap”
between branded products. Now retailers will be able to slow their
The big question is, will the trend continue? The rise in branded
sales this time might be due to consumers along the Eastern seaboard
stocking up pantries due to major snow storms.
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